Geico Policy Lawsuit Beats Company’s Motion for Dismissal

Geico has tried and failed to have a lawsuit dismissed that plaintiffs filed against them regarding their car insurance policies. The plaintiffs bringing the action claim that Geico failed to fully pay them what they were owed under the “total loss” coverage offered by their Geico policy.

The insurance carrier tried to have the Geico policy lawsuit dismissed by claiming that plaintiffs had failed to provide a claim for which relief could be granted and had failed to seek appraisals. The court disagreed with Geico’s reasoning on both points.

Why Was a Geico Policy Lawsuit Filed?

Janet Davis, Angel Randall, Melissa Schaller, Mandy Phelan, and Trey Roberts jointly filed a class action lawsuit against Geico regarding the compensation they received as a result of a car accident. Each plaintiff was covered by a Geico policy at the time of their accidents, and each of them suffered a “total loss”.

The plaintiffs each allege that their Geico policy was violated due to a failure to fully compensate them for their covered expenses. Specifically, plaintiffs claim that Geico breached their contract when they failed to compensate for “the full sales tax, title transfer fees, and registration fees due under their policies.”

In Ohio, there is a mandatory state sales tax of 5.75 percent, local taxes, $15 minimum title transfer fees, and $4.50 minimum registration fees. The plaintiffs argue that they were owed these expenses under their policies which offer coverage of “replacement costs” in case of a “total loss”.

This Geico Policy Class Action Lawsuit is Case No. 2:19-cv-02477-EAS-EPD, filed in the U.S. District Court for the Southern District of Ohio, Columbus Division.

What Does Motor Vehicle Insurance Cover in a Total Loss?

Under most insurance policies, a “total loss” is suffered when a car has been totaled in an accident. To qualify as a “total loss”, repairs to the vehicle must be either unsafe or more expensive than the car is worth. According to Insurance.com, state laws further regulate when an accident constitutes a “total loss” based on the amount of damage done. In Iowa, for instance, the cost of repairs must be at least 50 percent of the car’s pre-accident value; whereas, in Texas, repairs have to equal the total pre-accident value of the car for it to be considered a “total loss”.

This Geico policy class action lawsuit was filed regarding the compensation available to policyholders after a total loss. If you total your vehicle under a Geico policy, you have a few options. According to Carinsurance.com, you may be able to keep the vehicle if you really want to. Usually, your insurer will calculate the value of your vehicle, subtract your deductible from that amount, and write you a check. This process can be complicated if your car is financed.

According to the suit filed against the carrier, a Geico policy requires payment of the actual cash value of the vehicle in the event of a total loss. The actual cash value is defined as “the replacement cost of the auto or property less depreciation or betterment.”

What Was the Outcome of the Geico Lawsuit?

The plaintiffs suing Geico claim that the “replacement cost” of their total loss vehicles includes or should include the sales tax, registration fees, and title transfer fees associated with purchasing a new vehicle. Since the suit was filed, Geico has sought to have the case dismissed and has asked the court to compel plaintiffs to seek an appraisal.

Regarding the appraisal, the court found that plaintiffs weren’t required to seek an appraisal of their vehicles in order to contest the amount that they received through their Geico policy after a “total loss”. The court argues that plaintiffs weren’t contesting the “base value” of their totaled vehicles, but rather whether or not Geico owed them taxes and fees under their agreements.

In their motion to dismiss, Geico cited a rule included in the Federal Rules of Civil Procedure as cause for dismissal rather than a specific characteristic of the Geico policy. According to the court’s response, the rule requires that all pleas that state a claim for relief must give a “short and plain statement of the claim” that shows that the pleader is entitled to the relief in question. The statement of the claim must be factual and “plausible on its face.” Geico claims that plaintiffs failed to meet this requirement because they claim to be responsible for the reimbursement of sales tax only if the claimant actually purchases a new car.

The court denied Geico’s motion to dismiss on the grounds that the Geico policy doesn’t “condition payment of the actual cash value…on the purchase of a replacement vehicle” in case of a total loss. Simply put, Geico argued they only owed plaintiffs taxes and fees if those taxes and fees were actually incurred, and sufficient proof was provided to the insurer within 33 days of the accident, but the court argues that the Geico policy says no such thing.

When Can You Join a Geico Class Action Lawsuit?

Because Geico failed to have the class action lawsuit dismissed, plaintiffs are still demanding a jury trial. The insured are seeking damages to cover the amount they argue is promised under their Geico policy, their attorney fees, and any other costs associated with bringing the suit. Similar cases against Geico were also filed in Florida and California.

If you totaled a vehicle covered under a Geico insurance policy and weren’t compensated for the full replacement cost of that vehicle, you may be eligible to join a class action lawsuit against Geico.

Join a Free Total Loss Car Accident Class Action Lawsuit Investigation

If you were insured under an auto insurance policy, experienced a total loss car accident, and were not reimbursed for sales tax and other fees by your insurance company in the last 5 years, you may qualify to join a total loss car accident class action lawsuit investigation.

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